EFL reform is needed to prevent 'another Bury'

Perhaps a good starting place is the remarkable piece of financial chicanery that saw the club’s former owner, Stewart Day, mortgage Bury’s Gigg Lane ground to a company called Capital Bridging Finance Solutions, who in turn mortgaged it to a company registered in Malta, whose lenders are eight companies registered in the British Virgin Islands. An investigation by The Guardian revealed that 40 per cent of the money borrowed from Capital never went to Bury; instead, it was paid to an unnamed third party as an ‘introduction fee’.

How about another of Day’s financial masterstrokes, the decision made by one of his companies, Mederco, which has subsequently gone into administration, to sell off car parking spaces at Gigg Lane for £9,995 each? Unsurprisingly, the people who bought those car parking spaces want their money back. Unsurprisingly, the prospective buyers who trawled through Bury’s books at the start of the week did not want to have to pay them it.

Why not fast forward to the moment when the collapse of Day’s property development empire resulted in Bury’s compromised financial foundations collapsing? Steve Dale bought the club for £1. Eight months on, and the EFL are still waiting to receive evidence that Dale can meet the financial commitments of running a League One club. In theory, he should not have been allowed to complete a takeover without that proof in place.

What about just focusing on the events of Tuesday, when a prospective buyer, C&N Sporting Risk, pulled out because, in the words of their co-owner, Rory Campbell, they encountered “financial structures that I’d never seen before, and that certainly were unsustainable.”

Welcome to English football in 2019, a world where the rich get richer and the rest are forgotten. On Tuesday, in an act of remarkable crassness, Sky Sports News had a countdown clock ticking down the minutes and seconds to the EFL’s deadline for Bury and Bolton, who secured a lifeline on Wednesday when Football Ventures completed a takeover, to provide proof of their financial viability. As 5pm passed, there was a brief expression of regret. Then talk shifted to a discussion of Alexis Sanchez transferring his £350,000-a-week wages to Inter Milan.

Life had moved on. Only it doesn’t move on as quickly in Bury, and it won’t move on as quickly in Bolton either if the club’s new owners cannot successfully address a financial shambles every bit as catastrophic as the one that engulfed Bury. Perhaps it won’t move on for supporters of Macclesfield or Coventry either, clubs that have been dreadfully run in the last few years and that could easily find themselves following Bury through the Football League’s exit door.

If you are a fan of a club in the Football League, do not kid yourself that your club could not be next. In the 2017-18 season, the average wages to turnover ratio for a League One club was around 95 per cent. In the Championship, it was a suicidal 115 per cent. In other words, a club’s entire annual income, plus an additional 15 per cent, was spent on wages alone. How on earth is that sustainable?

It is a product of ‘chasing the dream’, that catch-all statement that is both an explanation of football’s enduring appeal and a precursor to its death knell. Even as they were mourning their club’s demise on Tuesday night, Bury supporters were referencing last season’s promotion from League Two as one of the best moments in its history. The promotion, of course, was achieved on the back of unsustainable borrowing and crippling debt.

Over-stretching in the pursuit of success is hard-wired into football’s modus operandi, and the current system of governance, especially in the Football League, has proved completely incapable of addressing the problem.

At a simplistic level, Bury’s problems occurred because a bad owner made bad decisions. But it is hard not to make those decisions when all your rivals are making equally ridiculous calls. Even the best owners feel compelled to over-spend, and the EFL is the only organisation that can change that. Yet when it comes to setting and enforcing the regulations governing finance in the Football League, the EFL is not fit for purpose.

Its board is comprised of nine directors, six of whom are divisional representatives elected by member clubs – three from the Championship, two from League One and one from League Two. Those directors clearly have strong vested interests, but they also have competing interests. What works for Fulham, a club hoping to get back to the Premier League, might well not work for Accrington Stanley, a club at the other end of the financial spectrum. Yet with the current EFL model, one size has to fit all.

So instead of decisive leadership, you get fudged decision-making and compromises that do not really suit anyone. Instead of rules being drawn up for the long-term good of the game, you get short-term fixes to suit the current owners of the clubs in the league. Instead of financial transparency, you get opaqueness and subterfuge, with owners and directors reluctant to divulge the stark reality of just how bad things have become.

It is casino capitalism at its most unpalatable, but because of their unique positions at the heart of their communities, football clubs should not commodities risked on the roll of a dice.

Independent governance is required, with the current EFL board replaced by an independent body standing separate from the 72 clubs in the Football League.

That body needs to introduce strict rules setting a limit on how much of a club’s income can be spent on wages and transfer fees. Unlike the current situation in the Championship, those rules need to stringently enforced, with punitive penalties if they are broken.

Any borrowing undertaken by a club should be publicly recorded, and anyone wanting to purchase a Football League club should have to hand over a bond covering one year’s worth of the club’s expenditure on wages that is held by the authorities in case it is required.

That might not prevent ‘another Bury’, but at least it would be a start.